Fidelity Bank Shares Have Declined by -30.9% YTD, Underperforming The NSEASI by 17%

Implications:
When annualised Fidelity Bank’s H1 2018 PBT and PAT of N13.0bn and N8.5bn are
both tracking well ahead of consensus 2018E forecasts of N19.8bn and N16.0bn
respectively. Consequently, we expect the market to react positively to these
numbers.

Positives:
Q2 PBT of N8.0bn grew 50% y/y, driven by a 41% y/y rise in non-interest income
and a -53% y/y reduction in loan loss provisions to N1.9bn. The growth in
non-interest income was underpinned by a N4.3bn gain in credit-related fees in
H1 2018 compared with a N568m in H1 2017.

Negatives:
PAT of N4.3bn declined by -44% y/y,
driven by a negative result of –N2.9bn in other comprehensive income compared
with an OCI gain of N3bn in Q2 2017.

Year-to-date,
Fidelity shares have declined by -30.9%, underperforming the broad index by
17%.